That’s good-and it’s bad-and it’s distressingly familiar. Throughout the industrialized world, as companies big and small seek higher productivity in the face of cutthroat competition and mind-boggling technological change, jobs have become the economic, political and social issue of the 1990s. Bill Clinton has labeled job creation the key indicator of his success as president. Eight of 10 Britons judge unemployment the most important issue facing their country. France’s new conservative government is debating schemes to help companies avoid layoffs, and even Japanese workers are growing anxious as companies quietly push hundreds of thousands into “voluntary” retirement. Last week in Paris, the Organization for Economic Cooperation and Development predicted that unemployment in its 24 member nations would average 8.5 percent this year and go even higher in 1994. Quick solutions are nowhere in sight. “We’re squandering our people,” warns European Community employment commissioner Padraig Flynn. “There’s somebody unemployed on every street, and on some streets there are dozens.”
The concerns are more than just economic. In Western Europe 20 million workers are idle. Nearly half of them have been jobless for more than a year, an alienated army contributing to social unrest and anti-immigrant violence. In the United States, unemployment crept below 7 percent in May for the first time since 1991, but millions of workers now find themselves on “temporary” status or in jobs that offer no benefits. Japan’s official unemployment rate is only 2.3 percent, but that doesn’t count thousands of “seasonal” manufacturing workers who can’t find employment or the burgeoning madogiwazoku-“window tribe”-of unneeded white-collar workers who collect paychecks to sit and look out the window. “The talk about the collapse of the long-term employment system in Japan is not entirely wrong,” says Makoto Maruyama, a personnel manager at electronics giant NEC Corp. in Tokyo. “The system has not collapsed, but we are trying to strike a very delicate balance between maintaining it and remaining competitive.”
Although governments have been slow to recognize it, the industrial world’s job crunch is due to more than just another blip in the business cycle. In Europe, Japan and Canada, as in the United States, many of the jobs being shed today will never return. Unskilled workers, paper pushers, line supervisors are not in demand. Imports have eliminated low-productivity jobs in labor-intensive industries like shoemaking and apparel manufacturing, and technological advances have led to steel mills that employ a few hundred workers instead of thousands. But the main cause of the worldwide economic restructuring lies elsewhere. With companies in almost every industry now competing in a hotly contested global market, management dogma everywhere is to keep costs to a minimum by figuring out where the organization adds value and eliminating everything-reports, products, managers, entire departments-that doesn’t.
If bigness was yesterday’s corporate creed, today’s is flexibility. Only the most vital operations must remain under the corporate roof, everything else is handled by networks of joint ventures, spinoffs, subcontractors, temporary workers. For individual companies, and for the economy as a whole, the result is higher productivity. But for most workers it means more instability and insecurity. Kingsbury Corp., a New Hampshire machine-tool maker, is one of many that have changed the social contract by hiring temporaries, who aren’t eligible for the company’s insurance and retirement benefits. “Our goal is a commitment to a core employment level, letting temporary employment float up and down with the business cycle,” says vice president Jeff Toner. With business down, Kingsbury laid off 90 temps in May.
Politicians tend to equate unemployment with “deindustrialization,” as they respond to unemployed steel-workers marching across the television screen. But manufacturing isn’t vanishing from high-wage countries; rather, companies have learned to do more with fewer people and to ship less-skilled parts of the job abroad. Just last week NEC announced that it would become the first Japanese company to begin production of memory chips at a plant in China. That’s not the hemorrhage of high-tech jobs some imagine: while Chinese workers will perform the routine assembly chores, virtually every piece of equipment in the expensive new facility will be made in Japan by NEC’s own workers and subcontractors. But it does mean fewer jobs for Japanese workers who lack the skills to move into more complex types of work.
Too many applicants: Unskilled workers, whether they previously earned their living in industry, in government or in the service sector, are at the heart of the unemployment crisis everywhere. After years of dismal productivity performance, banks, insurers and stockbrokers have finally figured out how to put computers to work efficiently, making thousands of filing clerks and keypunch operators redundant. Even where manufacturing flourishes, the unskilled won’t find jobs. SynOptics Communications of Santa Clara, Calif., is a fast-growing manufacturer with 1,400 workers. Most of them, however, are the engineers and software experts who develop its products. Only 200 work in the plant that makes the $600 million worth of computer networks it expects to sell this year-and many of those are people with technical degrees who test equipment, not unschooled workers who assemble it. Want a job in the plant? When the company interviewed for 200 future factory-floor openings this spring, 4,500 people applied.
Governments, it’s fair to say, have had difficulty confronting the job dearth of the 1990s. Only a small part of the problem is cyclical, so the traditional remedies-a tax cut, a shot of government spending-won’t make much difference. Faster economic growth is no automatic answer, either; although the EC created 9 million new jobs in the late 1980s, the number of unemployed workers fell by only 3 million as women and immigrants entered the labor force to fill many positions. Things that might make a difference, like scaling back the long-term jobless benefits that relieve many unemployed Europeans of the need to take new work, are political dynamite. And everywhere, deterrents to job creation in the form of taxes and social-insurance charges are on the rise.
The universal hope is training. The hope is not entirely unfounded: it’s clear that countries with well-trained workers will have a better chance of landing high-wage jobs. But a fair percentage of the work force simply isn’t able to make it through a training program; in Germany, which has one of the world’s most far-reaching worker-training systems, one in four people between the ages of 25 and 30 has no formal certification. And even training does not make workers immune to the growing uncertainties of a world in which employers remake their business strategies from one day to the next. Adapting training, unemployment and social-welfare programs to such a dynamic world is a challenge of the first order. But governments had better get with it. With tough global competition and rapid technological change now economic constants, high unemployment and insecurity will haunt the world’s most prosperous countries for years to come.
